From MIT Blackjack Team to Amazon Acquisition: The Lexcycle Story

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Neelan Choksi says he has an “addictive personality.” That might explain why he carefully orders an orange juice at the espresso bar, while I jack up my caffeine intake with another 12-ounce latte. We’re sitting at the Espresso Vivace in South Lake Union on a quintessentially rainy Seattle afternoon in early May.

Choksi’s company, Lexcycle, has just been bought by Amazon, and he’s in town doing some house-hunting. Lexcycle (pronounced like the word “lexical”) makes the e-book reader application Stanza for the iPhone, iPod Touch, and desktop. The three-man startup is based in Austin, TX, and Portland, OR. Interestingly, Choksi says that just a year ago, he barely knew anything about the e-book industry. Let’s just say the man has gotten up to speed fast. How did he do it? It turns out Choksi has always been a remarkably fast learner, and the twists and turns of his career to date are already enough to fill a how-to book on entrepreneurship.

The story goes back to 1988-1992 when Choksi was a chemical engineering major at MIT. He was a member of the famed MIT Blackjack Team, and says he netted upwards of $100,000 for his efforts. (He says he rarely plays anymore.) After graduating, Choksi worked at Exxon Research and Engineering for four years, developing software to solve problems for refineries. He then went to business school at the University of Chicago and studied abroad at London Business School. That’s where the startup bug first bit him, and he ended up enrolling in a bunch of entrepreneurship classes. “I could not get enough,” he says.

After a six-month stint at Andersen Consulting (now Accenture), he quit to work on his first startup. He had to write a check to leave—which he could afford, thanks to blackjack—but it was well worth it. “I realized that each level above me was less and less the type of person I wanted to be,” Choksi says.

So in 1999, he joined TechTrader in Washington DC, which had been started by two of his friends from MIT. It was a business-to-business marketplace software vendor, and they raised $21 million in venture funding in the heyday of the Internet boom. “But we spent $29 million, and didn’t have the revenues to make it up,” Choksi says. What’s more, he says, “We didn’t know anything about the industry we were working with.” It was a classic dot-bomb, but Choksi got valuable experience as a “utility player,” he says, working on everything from engineering to marketing and sales.

TechTrader went under in July 2001, leaving Choksi and his team to think about what to do next. “We thought, ‘What do we know about?'” he says. The answer was software development for the Internet. Technical things like Web caching and object relational mapping, having to do with accessing scalable databases. So they bootstrapped a new company, called SolarMetric. In the early days, Choksi took odd jobs to support himself, including designing a website for a nonprofit. By 2003, the company was starting to take off, and Choksi moved back to his home state of Texas (he grew up in Corpus Christi), settling in Austin. SolarMetric grew to 13 people, never took outside financing, and was acquired by … Next Page »